Energy, Economics, and the Environment: Effects on African Americans

The economy is highly dependent on the abundance of commercial energy. Affordable energy supplies provide innumerable benefits to modern society: they help to heat and light hospitals and schools, to produce essential goods and services, and to transport people to work and home again. However, the detrimental effects of the current dependence on large- scale energy use are also far-reaching. Many households lack the financial resources to purchase enough energy to meet basic needs, while an even greater number of households are vulnerable to the negative health effects stemming from the current fuel mix. Likewise, energy prices, and oil prices in particular, appear to have undue influence on the general state of the economy and employment, such that a large proportion of the population is vulnerable to economic downturns triggered by fluctuations in the global energy market.

In no population is the mixed blessing of the modern energy system as evident as in the African American population. This report examines the effects of energy use on African Americans and determines that, as a group, African Americans are significantly more vulnerable than the general population to several factors including:

Higher Vulnerability to Energy Prices

African Americans are more than twice as likely to live in poverty as non-African Americans. As such the amount of money spent on fuel and electricity purchases represents a significant household expenditure. More importantly, African Americans spend a significantly higher fraction of their expenditures on direct energy purchases than non- African Americans across every income decile. In other words, poor African Americans spend more money on energy than poor non-African Americans. As a consequence of these two factors, African Americans dedicate a much higher share of their expenditures toward energy purchases. Increases in the price of energy are likely to negatively affect African Americans more significantly than the general population.

Higher Vulnerability to Macroeconomic Effects

Global oil prices currently have a unique role in affecting the timing and magnitude of business cycles. Nine of the last ten recessions have been preceded by periods of rising oil prices. During such periods of economic downturn African Americans are more negatively affected in terms of employment and wages than non-African Americans. These broader- scale economic effects are many times larger than those predicted from changes in the national energy bill.

Higher Vulnerability to Health Effects

African Americans have a significantly higher exposure to air pollution. Approximately, 71 percent of African Americans live in counties in violation of federal air pollution standards, and 78 percent of African Americans are located within 30 miles of a coal-fired power plant. As a partial consequence of this inequality, the African American community has a rate of incidence of asthma and other illnesses roughly three times that of the general population. Despite higher exposure, African Americans have more limited resources to combat these effects. The percentage of African Americans lacking medical insurance is 150% that of the general population. Similarly, African Americans are likely to be more significantly affected by some of the detrimental health effects of global climate change such as the increased incidence of heat-related deaths or possibly some communicable diseases.

As a consequence of this higher vulnerability, African Americans ought to have greater concerns with energy policy than the general population. Moreover, African Americans should arguably be less concerned about maintaining the status quo insofar as African American ownership of energy businesses and African American employment in the energy sector are disproportionately small. Along these lines, Sections 2.2 and 2.3 outline some of the major energy policy initiatives that may affect African Americans, for the better or worse, and provide guidance on the likely effects of each.